Shut Up, Texas

Environmental Factors Smack Down Another Right-Wing Meme

For years, business lobbyists complained about what they derided as “job killer” laws that drive employers out of California. Rival state governors, notably former Texas Gov. Rick Perry, made highly publicized visits to the Golden State in hopes of poaching jobs.

But new numbers from the U.S. Bureau of Labor Statistics tell a different story. Total jobs created in the 12 months ending Jan. 31 show California leading other states. California gained 498,000 new jobs, almost 30% more than the Lone Star State’s total of 392,900 for the same period.

This isn’t just a one-month blip: it’s a one-year trend. Kevin has a typically thoughtful explanation, which deeply implicates both international and local environmental policies:

There’s no more “Texas Miracle” for either Cruz or Rick Perry. We’re in the middle of a California Miracle right now. So how is Sodom on the Pacific pulling this off? Actually, that’s pretty easy to answer. California was hit hard by the housing bubble, while Texas wasn’t. So California’s economy took a big hit during the recession and the slow recovery, while Texas did pretty well—aided and abetted by a rise in oil prices. Now everything has turned around. California is rebounding strongly from the housing crisis while Texas is suffering from the global collapse in oil prices. There is, frankly, nothing very miraculous about either story. It’s just the business cycle at work in a fairly normal and predictable way.

So first, the international oil market –and by implication, the energy policies that create that market — dictate the economic fortunes of states. But what about local environmental policies?

Kevin leaves out an important aspect of why Texas was able to avoid the housing bubble. It has strict regulations on mortgage lending, for one thing — a fact that conservatives generally don’t want to talk about. But another of its key policies is that it lets builders build: the Lone Star State has some of the most permissive land use controls in the country. That protects against house price inflation, which in turn means that people are less inclined to borrow against their house prices that will surely skyrocket — because they won’t. They will thus be less likely to find themselves upside down in a housing sector crash.

Reader Comments

Interesting statistics you offer: California “created” 498,000 new jobs in the past year, Texas “created” 392,300, showing California created almost 30% more than Texas. You forgot to mention population differences.

And they say that statistics are often misused. The population of Texas was estimated in 2014 as 26,960,000, and the population of California was estimated as 38,800,000. Thus Texas population is approximately 69.5% of that of California.

Based on that comparison, on jobs created per person in the state, California “created” 12.83 jobs per every 1000 inhabitants, while Texas created 14.55 jobs per every 1000 inhabitants.

So California has not outperformed Texas, on a per capita basis over the past year, even though Texas’ economy has been severely hit by the collapse of energy prices. Make the comparison again when energy markets recover a bit.

And a job is not a job – jobs need to be analyzed to see their significance. If a much higher percentage of the jobs “created” in California are – or are not -lower paying than in Texas, of if they are public jobs, funded by taxpayers, while more new jobs in Texas are created by the private market, not at taxpayer expense, then that, too, would be significant.

California can create jobs at taxpayer expense, which is not a real accomplishment. Silicon Valley can create jobs that are not taxpayer funded, and that is a very worthwhile accomplishment. But giving the state credit for creating a job is a stretch, unless the state actually funds the new jobs. So California may well surpass Texas in that category. Haven’t seen those statistics. Actual state-created jobs most likely impose a serious net drain on the economy.

Don’t know about 2014, but in 2013, Texas’ Hispanic population had an unemployment rate of 6.9%; California’s rate for Hispanics was 10.2%. Texas Hispanics were more likely to live in an owner-occupied home than those in California (56.7% to 42.9%).

California has 12% of the U.S. population; 34% of the welfare caseload. Texas has roughly 8% of the U.S. population, but only 3% of the welfare caseload.

“But giving the state credit for creating a job is a stretch, unless the state actually funds the new jobs.” I couldn’t agree more. Tell that to Rick Perry and Ted Cruz. The whole comparison is silly. But it’s Texas’ comparison: and like most things concerning Texas, it’s ridiculous.